Monday, December 29, 2008

Sacramento Regional Real Estate Trends for December 27, 2008

Last stats post of the year, and the typical year-end inventory fall off is in effect, although not as precipitous as in previous years. This might have something to do with the lack of any real inventory growth at all in 2008; ignoring the weird spike in mid-March, the inventory high of the year happened in February.

I would have to say, the themes for the real-estate market in 2008 were capitulation and bifurcation. When the credit tap was shut off, the areas with the most speculative buying, along with the less desirable neighborhoods, saw prices plummet and foreclosures soar. The more wealthy neighborhoods responded by withholding inventory from the market in the hopes that conditions will improve. Both responses lead to a reduction in listed inventory as a majority of sales transactions took place in the REO market and didn't necessarily involve traditional listing services.

Overall, 2008 was the year when the impact of the housing bust began to impact the economy at large, and politics entered the mix. One mission of this blog is to attempt to use data derived from house listings as a way to gauge market direction. To say that politics has distorted the housing market is a huge understatement, and 2009 will be nothing if not worse in that respect.

I will post again later in the week with a revisit of last year's predictions, and a couple of my guesses.












6 comments :

patient renter said...
This comment has been removed by the author.
patient renter said...

capitulation and bifurcation

Agreed.

Overall, 2008 was the year when the impact of the housing bust began to impact the economy at large, and politics entered the mix

Agreed again. It almost public policy now to stabilize home prices through a variety of means. The discussion of the implications of such policy never took place, carrying on the long and distinguished American tradition of acting without thinking in times of crisis, and letting fear drive policy.

Anonymous said...

http://www.ibdeditorials.com/IBDArticles.aspx?id=314927812177008

Here's Biden on his job: "We'll look at everything from college affordability to after-school programs, the things that affect people's daily lives," he told ABC's "This Week."

We're not sure Biden could even tell us what the middle class is — in terms of income, wealth, education or any other meaningful measure. But we are sure one thing is certain to come out of this: A greater resentment between economic classes, stirred up intentionally as part of a divide-and-conquer strategy ultimately intended to impose punitive taxes on those deemed "wealthy."

The media and the left, which are often indistinguishable, have spent the last eight years telling those in the middle class that they're "losing ground" or will be the "first generation to have less than their parents did."

It's all nonsense, of course, but it seems to be effective. Obama's pledge to " rebuild the middle class" by giving tax breaks to "95% of workers and their families" no doubt won him a lot of votes.

But guess what? The middle class did get a tax break — a big one, it turns out — under President Bush. As Congressional Budget Office data show, the effective tax rate on the middle fifth of households fell from an average of about 17.1% under President Clinton to 14.4% under Bush. That's a 16% tax cut for the middle class.

Another oft-heard claim is that middle-class incomes are stagnant or shrinking. But a study last year by the Minneapolis Fed concluded that "incomes of most types of middle American households have increased substantially over the past three decades."

Class warriors such as Biden like to cite median household income as evidence of stagnation. And on the surface, it seems convincing: Real household income did grow just 18% over the past 30 years.

But after correcting for distortions in the data, Terry Fitzgerald, a Fed senior economist, found something else: "Median household income for most household types . . . increased by 44% to 62% from 1976 to 2006." And per-person income surged 80%.

Rather than stagnating, income has grown at an extraordinary pace. Yet that story never quite gets told.

Instead, we hear about another myth: "growing inequality." But according to the accepted measure, the Census Bureau's Gini ratio, there was virtually no change in inequality from 2000 to 2007.

Yes, many Americans are suffering in this recession, including the middle class. But the last thing we need is another general in a phony class war telling people how bad they have it.

Deflationary Jane said...
This comment has been removed by the author.
Deflationary Jane said...

'A greater resentment between economic classes, stirred up intentionally as part of a divide-and-conquer strategy ultimately intended to impose punitive taxes on those deemed "wealthy."

The resentment for the upper class by the middle has been going through a huge shift with more hatred and pent up anger. Maddoff is now J6P's poster boy for everything wrong with the upper class. If Biden doesn't do something, it'll develop into torches and pitchforks action with the wealthy being persecuted. Is that what you want?

Most folks have no idea how bad out it is out there. That includes me until recently.

Also, you might want to give yourself a name if you continue to post.

Max said...

The resentment for the upper class by the middle has been going through a huge shift with more hatred and pent up anger.

I agree. There's been some interesting anecdotes both on how pissed off the soon-to-be-former middle class really is, and how out of touch the rich class really is. People forget that the history of this country is in mass movements and social protests. The last 20 years have been prosperous enough to quell social anger. That may change in 2009.